Wall Street analysts reacted to Intel and Nvidia’s unexpected partnership with a mix of excitement and skepticism, calling the deal both historic and uncertain.
Bank of America described the collaboration as a “historic deal,” highlighting Nvidia’s $5 billion equity investment in Intel and joint plans to co-develop CPUs and PC processors. The bank said the partnership could create an annual opportunity worth $25 billion to $50 billion over time.
According to BofA, Nvidia plans to integrate custom Intel x86 server CPUs into its rack architecture, which has so far relied on in-house Arm chips. At the same time, Intel will design new “x86 RTX SoCs” that combine CPU and GPU components for the laptop market. Still, the bank warned that such collaborations may take years to generate meaningful results and noted ongoing concerns about Intel’s limited foundry customers.
Other analysts weigh in
Morgan Stanley offered a more reserved view, calling the partnership a “positive development overall” for Intel, though with benefits only “at the margin.” For Nvidia, extending NVLink to x86 systems helps strengthen its market moat, but the $5 billion investment raised questions about long-term financial implications.
Bernstein analysts took a more skeptical stance, stressing that while Intel may build Nvidia-custom x86 CPUs, the agreement does not involve Intel Foundry. They argued that without a foundry deal, Nvidia’s $5 billion investment is “just money,” reflecting its ongoing reliance on TSMC for manufacturing. Bernstein estimated TSMC could lose 1% to 2% of revenue if Nvidia replaces its Grace CPUs, but said Nvidia still prefers TSMC despite U.S. government pressure.
Meanwhile, Citi analysts turned negative on Intel, downgrading the stock to Sell. They argued that stronger graphics capabilities would not be enough to make Intel’s CPUs competitive with AMD’s, since processors remain the main driver of performance. Citi added that Intel’s stock already assumes success in its leading-edge foundry business, which they believe has little chance of succeeding.
